The recent real estate boom (bubble?) in China has clearly been fueled in part by the loose monetary conditions associated with the peg – but that is not the entire story either. As we will discuss later, the communist party’s control of both land and credit creates strong structural incentives for corruption, and gives the party a large direct stake in the real estate market. ... China’s existing growth model looks to be running up against real limits, both internally and globally. Sustaining growth will require reorienting China’s economy – and relying, at least on while, on rapid expansion of domestic consumption to sustain growth.